The Texas State Securities Board (TSSB) has filed a notice seeking a hearing to decide whether it should issue a cease and desist order against Celsius Network. According to the watchdog, Celsius is "illegally funding lending operations" through the sale of unregistered securities in the form of cryptocurrency interest-earning accounts.
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The regulator also claims the US-based company incentivizes smaller investors to invest in the Celsius EarnInterest-Bearing Accounts by paying higher rates of interest on smaller investments. The hearing is scheduled for February 14, 2022. The TSSB says Celsius is not licensed as a Money Service Business in Texas. However, the company conducts currency exchange and money transmission activities.
The move comes after four financial regulator issued similar accusations against BlockFi. According to the New Jersey Bureau of Securities, BlockFi has been funding its business at least partly through the sale of unregistered securities. Hence, the New Jersey Bureau of Securities assumes the company violated relevant securities laws.
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